Finance and Economic

Online video site YouTube is in talks with several major movie studios about renting movies to users by streaming the movies over the Internet according to a person familiar with the talks on Wednesday.

It would mark the first time the world’s most popular video site would charge its users to watch videos.

YouTube, which is owned by Internet search giant Google Inc, has held discussions with Lions Gate Entertainment Corp, Sony Pictures, a unit of Sony Corp, and Time Warner Inc’s Warner Brothers about online movie rentals, the person said.

In many cases, the movies would be available for rental for a fee in a system similar to Web rental programs from Apple Inc’s iTunes, Netflix and Amazon.com with newer movies. YouTube would likely charge a similar fee around $3.99 a rental.

YouTube, which is the world’s No.1 video website, currently offers video for free, on an advertising-supported basis.

It currently has a range of archive movies, TV shows and promotional clips from the three named studios and other partners on its site.

“We hope to expand on both our great relationship with the movie studios and the selection and types of videos we offer our community,” said YouTube spokesman Chris Dale.

YouTube is in the midst of talks and negotiations with a wide range of media content partners as it ramps up efforts to build a substantial library of current and archive professional movies and videos that it can monetize.

The site, best known as a place to seek out fun videos uploaded by users that feature themes such as skateboarding dogs and dancing babies, recently started to emphasize a growing amount of professional videos.

Advertisers are believed to favor professionally made videos over those of users. Hulu, a video site owned by News Corp, Walt Disney Co and NBC Universal, has had relative success attracting both users and advertisers with a range of full-length TV shows and older movies.

Last month, YouTube announced a partnership with Time Warner Inc properties including CNN and TNT. It agreed a similar deal in March with Walt Disney.

YouTube owner Google has come under growing criticism from Wall Street analysts and investors concerned the expense of serving millions of videos to users around the world everyday is costing the company more money than it earns from advertising.

(Reporting by Yinka Adegoke and Alexei Oreskovic; editing by Andre Grenon.)

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Nokia on Wednesday bolstered its smartphone line-up to better compete with Apple and put a price on the new laptop leading its foray into the fiercely-competitive netbook market.

The handset announcements, the latest moves by the Finnish firm to match Apple’s innovation in a sector switching focus to services and software, left some analysts unimpressed.

“Nokia has major challenges on developing user experience, and we might have to wait for a significant improvement until the second half of next year,” said Jari Honko, analyst with eQ Bank in Helsinki.

Nokia unveiled three new phone models and said its new Booklet 3G will go on sale for about 575 euros ($820).

Nokia has seen its profit margins drop over the last few quarters as handset demand has slumped, and analysts have worried that entering the PC industry, where margins are traditionally razor-thin, could further depress earnings.

But Gartner analyst Carolina Milanesi said Nokia had no choice.

“Nokia had to do it. You see more and more PC guys getting into the mobile operators’ shelves. It’s kind of the counterattack, it’s not just defensive,” Milanesi said.

With the move into laptops, Nokia is crossing the border between two converging industries from the opposite direction to Mac-maker Apple, which entered the phone industry in 2007 with the iPhone.

Nokia will face new rivals like HP, Dell and Acer and some commentators said the market could be too tough to crack.

At the same time Nokia’s history has been marked by major steps from one industry to another. In the early 1990s it sold most of its units, including rubber cables and home electronics, to focus on telecommunications.

Nokia said its new top-end N900 phone will sell for 500 euros. The phone, which has computer-like functions, is the Finnish firm’s first phone to use Linux software. The unveiling of the phone last Thursday helped to lift its shares 11 percent for the week.

PUTTING NOKIA MAPS TO FACEBOOK

Nokia has been looking for business opportunities in offering services like music downloads or games to cell phone users as the handset market matures, but so far its offerings have had limited traction.

Nokia also on Wednesday announced a long-awaited deal with social networking website Facebook that will link Nokia Maps to Facebook, and allow people to update their location and status directly via a Nokia Ovi account.

The first phone to support the service will be the N97 mini, which will start shipping to retailers in October. 

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Pending sales of previously owned U.S. homes raced to a two-year high in July, a real estate trade group said on Tuesday, giving more evidence that a recovery in the housing market was under way.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in July, rose 3.2 percent to 97.6, the highest level since June 2007, from 94.6 in June. Pending home sales contracts have risen for a record six straight months.

Analysts polled by Reuters had forecast pending home sales to rise 2.0 percent in July. Pending sales were 12 percent higher in July compared to the same period last year.

“The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” said Lawrence Yun, NAR chief economist.

NAR estimates between 1.8 million to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year and that roughly 350,000 additional sales would not have taken place without the credit. The scheme expires in November.

Recent data have suggested the housing market is starting to dig out of a three-year slump paydayloans. The collapse of the housing market was the main trigger of the worst U.S. recession in 70 years.

A recovery in the housing market would help combat losses at financial institutions, which have been battered by defaults on mortgages.

It would also improve the psychology of households, whose net worth has been decimated by the plunge in home values and encourage consumers to spend rather than save, analysts say.

The pending home sales index in the Northeast fell 3.0 percent to 78.8 in July but was 4.7 percent higher than the same period last year, the NAR said.

In the Midwest the index slipped 2.0 percent to 88.1 but was 8.1 percent above a year ago. Pending home sales activity in the South rose 3.1 percent to an index of 103.8, while contract activity in the West jumped 12.1 percent to 112.5.

(Reporting by Lucia Mutikani; Editing by Kenneth Barry)

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New York Federal Reserve Bank President William Dudley said it is too early to talk about curtailing the central bank’s long-term security purchases while the economic recovery is fragile.

“As financial conditions improve, which seems to be the trajectory, it’s a legitimate point to consider what you want to do in terms of your purchase programs,” Dudley told CNBC in an interview broadcast on Monday.

“My own personal view is I think it’s a little premature to be so confident that you want to pull all these things back right now because the economy still isn’t growing very fast and we do have a very high unemployment rate.”

Dudley’s comments show a divergence of views on the Fed’s interest-rate setting Federal Open Market Committee. Richmond Fed President Jeffrey Lacker said last week the Fed should consider foregoing the full extent of its long-term securities-buying pledge, which includes the plan to purchase $1.45 trillion of mortgage agency debt by the end of the year.

The Fed cut rates to zero in December and has pumped hundreds of billions into the financial system to fight the worst recession in 70 years. With signs of recovery in housing and manufacturing, the Fed has said the downturn appears to be leveling out. However, it also said any recovery is likely to be sluggish with unemployment, which was at 9.4 percent in July, painfully high for a while.

Dudley said in the interview that he is confident the central bank can withdraw its massive economic stimulus measures without allowing dangerous inflation to take hold.

“I’m completely committed to taking away the punch bowl at the right time,” he said. “I have no desire whatsoever to see inflation get out of control.”

The New York Fed head, who formerly ran the central bank’s trading operation that buys and sells Treasury securities to meet the Fed’s target interest rates, said the Fed has a range of options to prevent inflation even with the massive amount of money it has put into the financial system.

“We have tools to manage our balance sheet so that we’re not going to have an inflation outcome, bad inflation outcome,” Dudley said.

The Fed’s next policy-setting meeting is September 22-23. It has pledged to keep interest rates exceptionally low for an extended period to bolster the economy, but has already begun to taken some small steps toward exiting its aggressive stimulus measures.

The Fed said earlier this month it would end its program of buying $300 billion of longer-term Treasury securities by the end of October. It also said it would shrink the size of short-term cash auctions in September.

At the same time, sensitive to pockets of economic weakness, the Fed moved to boost credit to the ailing market for commercial real estate by extend an emergency lending program to mid-2010.

(Reporting by Mark Felsenthal; editing by Neil Stempleman)

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